Asset classes still seemed to be marching to the beat of their own drums on Tuesday, as equities rebounded while commodities were in the red.
What’s driving the markets these days?
Headlines:
- BOJ core CPI in May y/y: 2.1% (1.9% expected, 1.8% previous)
- FOMC official Bowman: Not yet at a point where it’s appropriate to cut rates since data should show inflation sustainably moving to 2% first
- Canadian headline CPI in May y/y: 2.9% (2.6% expected, 2.7% previous), core CPI in May m/m: 0.6% (0.2% previous)
- U.S. S&P CS Composite house price index in May y/y: 7.2% (7.0% expected, 7.5% previous)
- U.S. Richmond manufacturing index in June: -10 (-3 expected, 0 previous)
- U.S. CB consumer confidence index in June: 100.4 (100.0 expected, previous reading downgraded from 102.0 to 101.3)
- FOMC official Cook says that current policy is “well-positioned” but at some point appropriate to cut
- Nvidia shares rebounded nearly 7% after previous day’s slump
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Market correlations were still all over the place on Tuesday, as commodities like crude oil and gold tumbled while bitcoin and U.S. stock indices staged a gradual climb. Treasury yields and the U.S. dollar also ended up in the green, even after tossing and turning all day.
A surprise build in private oil stockpiles of 900K versus the projected reduction of 3 million barrels as reported by the American Petroleum Institute led WTI crude oil to close more than 1% in negative territory.
Meanwhile, the S&P 500 index and the Nasdaq snapped a three-day decline when Nvidia shares closed roughly 7% higher, following a major retracement the previous day. Other large cap tech companies like Meta and Alphabet also pared earlier losses.
FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Major Currencies Chart by TradingView
The Asian and European trading sessions were mostly uneventful in terms of top-tier data prints and directional moves among dollar pairs.
Bullish vibes came in play for the U.S. currency towards the end of London market hours, thanks to hawkish remarks from FOMC official Bowman who said that they are not yet at a point where it’s time to cut interest rates.
However, the dollar returned some of these gains upon seeing a couple of weaker-than-expected mid-tier reports and some risk-on moves in the stock market. Stronger than expected Canadian inflation figures also lifted the Loonie to close marginally in the green.
Upcoming Potential Catalysts on the Economic Calendar:
- German GfK consumer climate index at 6:00 am GMT
- Swiss UBS economic expectations index at 8:00 am GMT
- U.S. new home sales at 2:00 pm GMT
- EIA crude oil inventories at 2:30 pm GMT
- Japanese retail sales at 11:50 pm GMT
There’s not much on the docket in terms of major market catalysts for today, possibly leaving investors to take cues from individual driving factors of each asset class once again. With that, make sure you stay on the lookout for headlines influencing overall risk sentiment since these could dictate market trends for today!
Looking for your own spot to record your market observations & trading statistics? If so, then check out TRADEZELLA! It’s an easy-to-use
journaling tool that can lead to valuable performance & strategy insights! You can easily add your thoughts, charts & track your psychology with each and every trade. Click here to see if it’s right for you!Disclaimer: Babypips.com earns a commission from any signups through our affiliate link. When you subscribe to a service using our affiliate links, this helps us to maintain and improve our content, a lot of which is free and accessible to everyone–including the School of Pipsology! We appreciate your support and hope that you find our content and services helpful. Thank you!